A Roadmap for Michigan’s Energy Markets and Planning Program

As Michigan’s new energy laws were implemented and work on the grant from the National Association of State Energy Officials (NASEO) Michigan Energy Office (MEO) proceeded, it became clear that all stakeholders would need a common understanding of Michigan’s existing energy environment.

The following detailed roadmap presents a comprehensive description of Michigan’s energy circumstances as of fall 2017, including a thorough review of current state, federal, and environmental regulatory frameworks; industry business models; and utility performance metrics. The baseline data and narrative information supplied by Public Sector Consultants (PSC) will be used as the foundation to inform and educate a larger integrated group of stakeholders, all with an interest or a financial stake in energy decisions in Michigan. A mix of regulatory agencies, nonprofits, politicians, utilities, businesses, and residents must all understand what motivates the policy direction of Michigan’s new energy legislation, as well as the road map process.

In line with the roadmap and its description of Michigan’s energy circumstances, a case study of Michigan’s Upper Peninsula (U.P.) is also included. The U.P.’s energy infrastructure has historically faced difficulties providing reliable power at fair and affordable rates—problems that have become increasingly acute even through the period of the NASEO MEO grant. These problems are not unique to the U.P., and are becoming increasingly common nationwide. Across the country, utilities, regulators, government officials, and others are struggling with the complex questions of how to replace the energy, ancillary services, and capacity provided by retiring power plants.

Due to the need for fair and fast solutions to address pressing concerns over affordability and reliability, Michigan realized it would have to leverage existing processes and relationships to identify and implement necessary solutions. With a number of different providers servicing a largely rural geography and a few dispersed industrial energy loads, addressing the U.P.’s energy problems would require coordinating the provision of all energy, ancillary, capacity, and delivery services of gas and electricity providers. Solution design and implementation also had to integrate informed stakeholder input, and needed to be affordable as well as respectful of the environment and smaller-scale economies.

This process developed several potential solutions to the U.P.’s electric reliability challenges. As alternatives to large new baseload generation or high-voltage transmission lines, the development of modular natural gas generation, micro grids, local distributed resources, modest transmission upgrades, renewable energy resources, energy waste reduction and efficiency, demand response, and redispatch options can be more cost-effective ways to supply the U.P.’s modest energy needs. The use of more localized resources is a departure from the traditional centralized, expensive, and transmission-heavy system of today. Such solutions also have the benefits of increased self-reliance and economic development opportunities in Michigan’s Upper Peninsula.

Addressing these issues in the U.P. involved stakeholders working together to identify both short- and long-term solutions to reduce the cost burden to U.P. customers. With recognition of the energy environment in which they exist, this independent, integrated region of stakeholders took a bottom-up approach to solving their power problems and helping their communities. The experience Michigan gained working with U.P. energy stakeholders to craft solutions to some very tenacious problems could be useful to other states facing similar situations.